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Weekly Update

Economic Highlights

Stock indexes surged higher on Friday, assisted by a growing optimism the U.S. and China can strike a trade deal before the March 1 deadline. The Dow rose 1.7%, the S&P 500 was up 1.1% and the Nasdaq was up .6%. The Dow had its eighth weekly gain, which would match the longest streak so far since 2017, according to FactSet data.

U.S. retail trade fell by 1.2% from a month earlier in December 2018, following a revised 0.1% growth in November and missing market expectations of 0.2% gain. It was the steepest drop in trade since September 2009, as sales fell in almost all categories. Excluding automobiles, gasoline, building materials, retail sales dropped 1.7% in December after an increase of 1% in November. These so-called core retail sales correspond most closely with the consumer spending component of GDP.

In a speech at the White House, The President declared a national emergency to secure $8B in funds to build a wall along the southern border with Mexico. The move was immediately dismissed by Congressional Democrats and is nearly certain to end up in court.

A Reuter’s poll of economists showed the chance of a recession in the next 12 months now stands at 25% (vs 20% last month) with 2019 GDP growth forecasts dropped to 2.4%. Half the economists polled expect only one more rate hike for 2019. That compares with two hikes suggested by the Fed’s “dot plot” projections and in last month's poll. The report repeatedly highlighted the US-China trade war as the main downside risk (with Brexit as a secondary risk). A majority of the economists warned any further escalation in the trade war would potentially bring the next US recession.

US Economy – The Week Ahead

Tuesday 2/19/2019

  • No data

Wednesday 2/20/2019

  • Federal Reserve Open Market Committee (FOMC) January meeting notes released

Thursday 2/21/2019

  • Initial Jobless Claims – Consensus Estimate: 230,000 (-5.4% WoW), Prior Week: 239,000 (-7.5% WoW)
  • U.S. Durable Goods Orders Month-over-Month Growth – Consensus Estimate: 1.8%, Prior Month: 0.8%
  • Existing Home Sales – Consensus Estimate: 5,100K (2.2% MoM), Prior Month: 4,990K (-6.4% MoM)
  • Leading Economic Indicator Index (Month-over-Month) – Consensus Estimate: 0.15%, Prior Month: -0.10%%

Friday 2/22/2019

  • No data
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